HP Inc says it will move forward with its plans to cut costs and refocus its business as it posted better than expected quarterly numbers.
For the three months to July 31, Q3 of its 2016 fiscal year, the printers and PCs half of the HP split reported:
- Revenues of $11.9bn were down four per cent on the year-ago total of $12.4bn.
- Net earnings of $783m on the quarter were down eight per cent from $854m in the 2015 Q3.
- Non-GAAP earnings per share of 49 cents topped analyst estimates of 44 cents.
- Personal systems group revenue of $7.5bn was flat on the year-ago quarter. Revenues from commercial systems were down 3 per cent, while consumer revenue increased 8 per cent. Notebook shipments were up 12 per cent, while desktops were down 4 per cent.
- Printing group revenue of $4.4bn was down 14 per cent from $5.1bn in the year-ago quarter.
- HP says it is on track with its plan to lay off 3,000 workers by the end of the year in an effort to reduce its overhead costs.
CEO Dion Weisler put a positive spin on the numbers, noting that HP was able to meet its own guidance for the quarter.
"We delivered on our financial commitments and continued to make solid progress in executing against our core, growth and future strategic framework,” Weisler said of the results.
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"Although the markets remain challenged, we have the innovation and executional rigor needed to continue to take profitable share and invest in the right opportunities to drive long-term success for the company."
Weisler also pointed to HP's efforts to turn around its printing business by moving away from the lower-end printer markets and targeting business and professional printing customers that yield better revenues. As the HP boss told analysts, "not all printers are created equal."
Analysts, however, remain unconvinced. Bernstein Research noted that, despite HP's efforts, the overall market decline does not bode well for Weisler and co.
"We continue to worry about HP's printing business, which has been declining sharply in both hardware and supplies in recent quarters," the analyst house notes. "HP had stated at its analyst meeting in September that it expected supplies to stop declining at the end of FY 16 – on its earnings call in November, it pushed that bogey out to the end of FY 17. We believe that this goal remains unrealistic."
Wall Street seems to agree. HP Inc stock was down 5.5 per cent in after-hours trading. ®